Trade with Turkiye

Prime Minister Shehbaz Sharif’s trip to Turkiye seems to be yielding some trade and investment dividends, with Turkish businessmen telling him that they are still interested in Pakistan. Shehbaz was in the country for the oath-taking ceremony of Turkish President Recep Tayyip Erdogan, who won his term last week. Shehbaz has worked closely with Erdogan and Turkish investors for several years, dating back to his time as chief minister of Punjab. Turkiye has also been helping Pakistan through its dollar crunch — despite having its own ongoing financial crisis — by agreeing to a bilateral barter trade system. This is doubly important because Turkiye has a large trade surplus with Pakistan.

Shehbaz believes the value of trade could cross $5 billion in the next three years, up from the current figure of about $1 billion. This is partly because the in-kind model provides some reassurance to investors that despite our current cash crunch, they will get their money’s worth. The investors were apparently very interested in joint ventures, which also help reduce risks to their investment. However, even though Shehbaz has suggested that areas such as agriculture, energy, information technology and construction were ripe for trade and investment, concrete offers or even inquiries have not been identified by government officials, any companies, or the media.

Discussions with Iranian officials are also in the early stages, meaning that even if they are progressing well, it is unlikely that an actual deal is in the offing. Meanwhile, most of the other countries whose leaders Shehbaz met have little direct economic interest in Pakistan, either due to their populations, locations, or levels of development. However, that is not to say that smaller investors may have been wooed by the PM and his record with foreign investment — keep in mind his long-running, albeit controversial, success at bringing in Turkish investors to take over flailing government agencies, such as sanitation in several Punjab cities and energy projects.

Published in The Express Tribune, June 6^th, 2023.

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